9 Drivers of the America-China Cold War

Abstract

The relationship between the USA and China has been quite complex bordering on a typical love-hate relationship. While both countries have an extremely extensive economic partnership, and their economies are too closely intertwined to afford a long-term rivalry yet there are quite serious issues between the two resulting in the start of the Cold War-2.

This article discusses the nine crucial issues souring the relations between the two superpowers of the day.

Introduction

“The capitalists will be happy to sell us the rope with which we will hang them.” -Vladimir Lenin

Diplomatic relations between the USA and China started during the presidency of George Washington and remained very cordial till 1949 when the Communist Party under Mao ze DONG succeeded in the civil war by defeating the Nationalists backed by the USA. Misreading history more than the ideological differences, the USA recognised the renegade province of Taiwan as the legitimate government of China and thus did not establish relations with the People’s Republic of China for 25 years. Both countries fought against each other indirectly during the Korean War in the early 1950s and then in the 1960s/70s during the Vietnam War.

The rift between China and the USSR in 1969 created an opportunity for both countries to come together; Richard Nixon’s 1972 visit to China resulted in a diplomatic thaw. Since then, relations between these two countries remained cordial; both countries cooperated to defeat the Soviet Union in Afghanistan by providing arms to the Mujahedeen during the 1980s. Afterward, American FDI was the key factor in the rapid technological development of China making it the global manufacturing hub. China is the second-largest creditor of the USA while American firms have invested billions in China.

However, these relations came under stress in 2010 when Barack Obama announced his Asia pivot strategy and supported Japan in the Senkaku Islands dispute. Since then, the relationship between the USA and China has been quite complex bordering on a typical love-hate relationship. While both countries have an extremely extensive economic partnership, and their economies are too closely intertwined to afford a long-term rivalry yet there are quite serious issues between the two such as

1. Ambitions for Global Hegemony

No doubt, the United States is the most dominant global power thanks to its economic clout, technological sophistication, military might, territorial security, and dollar dominance. It possesses enormous assets to maintain its predominance, including military primacy, multiple alliances, powerful Western-led international organizations, and unmatched soft power. But, slowly and surely, its margin of superiority is shrinking due to internal weaknesses and changing global power equations.

While an economically emerging China has eroded the economic pre-eminence of the USA and is threatening its dollar dominance, one of the main pillars of American hegemony, a resurging Russia is challenging its military supremacy in every theatre of conflict. Thus, to preserve its global hegemony, it has a set of strategies by utilising all the diplomatic and other means at its disposal.

In 1992, Paul Wolfowitz wrote a document arguing that the United States would remain the “unipolar global hegemon”. It became the input for the now notorious 1997 document “Project for the New American Century”. It was developed further into the declaration in 2011 of the Pivot to Asia. All these various doctrines have been codified into the US National Defense Strategy and National Security Strategy. Essentially what these documents are claiming is that China and Russia, Iran, North Korea, and violent Islamic extremist groups are the enemies of the United States and existential threats to the U.S. and the U.S.-imposed world order. China, as the most significant power, is the greatest threat and must be treated as such.

Since its publication, all the successive American presidents have put countering the military rise of China at the forefront of America’s national security strategy and its national defence strategy. Pentagon officials see China as the country to beat and worry that China’s increased military spending, growing global footprint, and extensive technological research will close the gap that has ensured America’s global military dominance, raising the prospect of a flare-up based on miscalculation or deliberate provocation.

Focussing mainly on countering China, it is trying to block China to gain an advantage in several emerging technologies. Additionally, the United States seeks to prevent it from establishing a dominant position in Asia-Pacific Region by maintaining, deepening, and expanding America’s alliance ties there and placing intermediate-range ground missiles in the region.

On the other hand, after 200 years of ignominy at the hands of European colonialism, China is rightfully trying to regain its pre-eminent global position. Chinese know that despite strong Sino-US economic and trade interdependencies, the USA is ideologically committed to confronting and containing China, economically, politically, and militarily. That’s why China has repeatedly warned its neighbours including Japan, South Korea, and Australia, not to allow the US deployment in their territory.

2. Clash of Ideologies

Believing in Francis Fukuyama’s thesis of the End of History thesis, the American media, establishment, and the public was expecting Pax Americana 2.0 in the post-Cold War era in which Western values and practices would be the norms of the statecraft all over the world. However, the rapid rise of China has just shattered their dream; China is condemned because it is destroying the liberal world order and is substituting its own for it which is not democratic, not egalitarian, not focused on international law, etc.,

The “Beijing consensus” meanwhile challenged democracy on a worldwide scale. China’s much better economic performance than the Western democracies — even though democracy was supposed to facilitate economic growth — worked miracles in reducing poverty and maintaining social order and progress China’s rise is thus a trend that needs to be reversed, says the liberal media.

3. Taiwan’s Independence

The most dangerous dimension of the Sino-US ‘contest’ is the prospect of a US challenge to China’s claims on Taiwan. China rightfully claims Taiwan as its renegade province; the possibility that Washington may reopen the ‘One China Policy. As President Xi recently reiterated, China will use all its capabilities to defend its ‘territorial integrity. US miscalculation could lead to conflict. It was therefore a shock when Trump broke with decades of precedent by speaking directly with the leader of Taiwan. The call threatened to reopen a largely dormant ideological fight over self-determination and democracy in the Communist regime.”Taiwan is China’s core interest,” Gen Wei said. “On these issues, it’s extremely dangerous to challenge China’s bottom line repeatedly. If anyone tries to separate Taiwan from China, China’s military will take action at all costs.”

4. Trade war

The USA wants China to fix the trade deficit; instead of the US trade deficit decreasing it increased. This was partly a product of the US economy improving and thus stimulating America’s demand for more Chinese products. President Trump was embarrassed and angry that the trade deficit had grown. He understood the deficit was the cause of factories closing in the US, the loss of jobs, and a huge and dangerous debt, and that using shock treatment was the way to successful negotiations. Trump’s chosen strategy was to place tariffs on Chinese goods entering the US knowing China depended more on exports than the United States. Thus, in March the Trump administration announced tariffs on USD 60 billion of Chinese imports. At the time Trump cited the results of Section 301 (of the Trade Act of 1974) investigation into China’s unfair trade practices: disregard for rules on intellectual property, discrimination against foreign (e.g. American) firms, and industrial policies that favoured Chinese companies. The tariffs had a significant impact on China, both economically and politically.

The growth of China’s GDP slowed. Its stock market sputtered. There was a slowdown in construction. Productivity declined. There were increasing worries about domestic debt (now said to be 250 percent of GDP). The yuan fell and this threatened China’s influence in international finance. Chinese leaders felt compelled to answer tit-for-tat. China placed tariffs on American products exported to China. Fares on some items such as soybeans were aimed at Trump’s favourite voting constituencies. Meanwhile, China’s media accused President Trump of launching a trade war.

5. Cyber-warfare/ Technology Theft

Despite making tremendous strides in technological development and diffusion, China is at least 20 years behind the USA in sophisticated technology. It is therefore American prime interest to restrict China’s access to and development of those advanced technologies which it thinks could bolster China’s global technological ranking. It also became glaringly evident that China’s “Made in China 2025” strategy launched in 2015 was on a collision course with President Trump’s “Make America Great Again” policy. The former would make China the foremost country in the world in advanced manufacturing and much more. This isn’t an ‘arms race’ as in the Cold War era. This is akin to what Marie Boas Hall, the great historian of science, called the ‘Scientific Renaissance’ to designate Scientific Revolution 1450–1630. Russia and China are in the vanguard; Trump wanted to fix America’s economy and restore America’s global leadership in high-tech and a lot more. Thus, the conflict grew.

6. Currency Manipulation/Banking Issues

The USA has been accusing China of currency manipulation and other malpractices to gain an undue advantage in international trade. US law sets out three criteria for identifying manipulation among major trading partners: a material global current account surplus, a significant bilateral trade surplus with the United States, and persistent one-way intervention in foreign exchange markets. China was last designated a currency manipulator under the Clinton administration in 1994.

In May 2019, although the USA refrained from declaring China a currency manipulator based on new, tougher criteria measuring a country’s global current account surplus, it kept China on an enhanced monitoring list due to a “misalignment and undervaluation of the RMB relative to the dollar”.

7. Belt and Road Initiative (BRI)

Another significant bone of contention between the two global powers is the Chinese highly ambitious project of BRI; $4 trillion of promised investments in 65 countries representing 70 percent of the world’s population, 55 percent of its GNP, and 75 percent of its energy reserves. The BRI aims to stabilize China’s Western peripheries, rekindle its economy, propel non-Western international economic institutions, gain influence in other countries, and diversify trade suppliers/routes while circumventing the U.S. pivot to Asia.

Although Americans express their reservations about the BRI in terms of its non-transparent terma, inadequate standards and practices, and the erosion of Western development norms, it is its geopolitical implications that frame Americans’ views of BRI. The initiative is sometimes viewed as a deliberate attempt to economically marginalize the United States, to create a Eurasian sphere of influence, or as a pretext for expanding China’s overseas military presence. At the very least, perceptions that China is embarking on a new, “assertive” phase of statecraft elevate the scrutiny BRI faces.

8. Human Rights/ Democracy

One of the stated aims and goals of the foreign policy of the USA is the promotion of democracy and human rights all over the world but is used selectively. While the USA is silent about the lack of democratic setup and violations of human rights in its allies, particularly in the Middle East, it is accusing China of mistreatment of its Uigur Muslims and Hong Kong protesters. China is extremely sensitive about these two issues and blames the USA for fomenting trouble in these areas. They know that the USA had been training Uyghur Muslims in various war theatres for their possible use inside China.

9. South China Sea

The South China Sea is a nexus of the China-US contest for dominance in the region; the United States has frequently accused China of “militarization”, assertiveness, and even bullying”. However, in China’s view — as well as that of several Southeast Asian countries — it’s the US that has militarized the region by assertively and aggressively projecting power there. The US, unlike China, has long had military bases in countries bordering the South China Sea, including the Philippines and Thailand.

Moreover, the US has recently significantly increased its naval and air operations in and over the South China Sea, including its freedom of navigation exercises. The warships and planes the US sends on such operations challenge China’s territorial and judicial claims. China sees the US freedom of navigation patrols as “gunboat diplomacy” or even bullying. As President Xi recently reiterated, China will use all its capabilities to defend its ‘territorial integrity. US miscalculation could lead to conflict.

Future Scenario

According to general perception, the US-China relations during the last 40 years have followed a fairly predictable 4-year pattern corresponding with the American election campaign cycle. During every election campaign, American politicians need a scapegoat to rally their respective supporters. After the fall of the Soviet Union, terrorism and China are the two most effective bogeys for all presidential candidates during their respective election campaigns. Whether it is Ronald Reagan or Bill Clinton on the one hand or George Bush or Barrack Obama on the other, they always castigated the incumbent American administration for their weak stands against the Chinese. However, once in power, all of them adopted the same set of policies of the predecessors they always ridiculed during their campaigns.

They were expecting that during the 2016 elections, Trump used the China card the same way his predecessors had been doing and hoped that he would not follow what he stated. However, all their hopes were dashed by the actions taken by the Trump administration during his four-year- term. He did not follow the usual practice of appeasing the Chinese once in power and broke the tradition with serious consequences for the global economy besides causing damage to bilateral relations. The outbreak of the COVID-19 pandemic further acerbated the relations as the beleaguered Trump blamed China for this pandemic

Consequently, during the recent elections, both parties needing some tangible election issues, found China a “whipping boy” and portrayed it as a menace to America. As the common Americans’ knowledge of China is superficial, their mindset formed mainly by the biased coverage of China by the mainstream media of the USA, the number of Americans that believe China is a threat has tripled in the last year. Under this atmosphere of acrimony, there is scant hope of any improvement between the two countries in the near future.

Tail Piece

The width and breadth of acrimonious relations between the two global powers of the day were visible during the high-level talks in Alaska between China and the USA in March 2021. These signalled a historic shift in Chinese attitudes, summed up neatly in those three resounding sentences from the Chinese foreign minister Yang —

“So let me say here that, in front of the Chinese side, the United States does not have the qualification to say that it wants to speak to China from a position of strength. The U.S. side was not even qualified to say such things even 20 years or 30 years back, because this is not the way to deal with the Chinese people. If the United States wants to deal properly with the Chinese side, then let’s follow the necessary protocols and do things the right way.”

From the e-book “International Relations; Basic Concepts & Global Issues- A Handbook”, published by Amazon and available at https://www.amazon.com/dp/B08QZSRWT1